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Working Paper
What Caused the Great Recession in the Eurozone?
Since 2008, the Eurozone has undergone two recessions, which together constitute the "Great Recession." The combination of a decline in output and disinflation as well as a persistent decline in inflation suggests that contractionary monetary policy was one factor. This paper makes two methodological points. First, in analyzing the causes of the Great Recession, it is important to distinguish between credit and monetary policy. Second, a multiplicity of estimated models can "explain" the Great Recession. In practice, economists choose between models through an associated narrative that ...
Journal Article
The Treasury-Fed Accord : a new narrative account
Journal Article
The rules verses discretion debate over monetary policy in the 1920s
The question of whether monetary policy should be guided by legislated rules or left to the discretion of the policymaker has been a subject of debate since the early days of central banking. An important episode of the debate occurred in the 1920s when Kansas Congressman James Strong introduced legislation (the Strong bill) which was intended to institutionalize the price level stabilization policy that Benjamin Strong had implicitly followed as head of the New York Federal Reserve Bank from 1923 to 1927. In this article, Robert Hetzel reviews the debate which took place in the congressional ...
Working Paper
What is the Monetary Standard
The monetary standard emerges out of the interaction of monetary policy with the structure of the economy. Characterization of the monetary standard thus requires specification of a model of the economy with a central bank reaction function. Such a specification raises all the fundamental issues of identification in macroeconomics.
Journal Article
The Real Bills Views of the Founders of the Fed
The founders of the Federal Reserve desired to end financial panics. In order to achieve this end, they created a decentralized collection of reserve depositories ? the Federal Reserve banks. They also wanted to remove control of the financial system from Wall Street. At the time, policymakers understood financial panics as resulting from speculative excess, especially on Wall Street. These "real bills" views of financial panic originated in the 19th century American experience. They influenced monetary policy significantly until the post-World War II period.
Journal Article
The monetary responsibilities of a central bank
This article provides an analytical framework for discussing the monetary responsibilities of a central bank. The framework shows how the central bank gives the price level a well-defined equilibrium value and how the central bank causes this equilibrium value to change over time.
Journal Article
A mandate for price stability
The Neal Resolution, now in Congress, would make price stability the dominant goal of monetary policy. The first of these two articles holds that policymakers discretion over the price level increases political conflict. Further, it argues that removing this discretion would restore the dollar to the role envisioned by the Framers of the Constitution. The second article proposes an instrument for measuring inflation expected by the market and argues that such a measure would encourage monetary policy-makers to maintain price stability.
Journal Article
Japanese monetary policy: a quantity theory perspective
Journal Article
The cause of the dollar depreciation
An abstract for this article is not available